Simon Hoare
Main Page: Simon Hoare (Conservative - North Dorset)Department Debates - View all Simon Hoare's debates with the HM Treasury
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Simon Hoare (North Dorset) (Con)
We now have the enjoyable prospect of an Adjournment debate lasting an hour and a half, which I know will fill the Minister with joy. I can see the boyish smile on his face—he just cannot contain himself. I do not intend to take an hour and a half, although a number of colleagues from across the House have indicated that they wish to intervene.
I am very pleased to have secured this debate. It is clear that our banking world is going through a period of transition. There are changes in technology; there is the move—some would say at too high a speed—towards a soon-to-be cashless society; and there is the cost of running branches, which includes insurance, business rates, staff costs and the like. I know full well that the closure of a high-street bank hits an area hard, whether the area is urban or rural. However, North Dorset is a rural constituency, and the thrust of my thesis is that the impact is felt disproportionately harder in rural communities than in an urban setting.
Why do I say that? I do not believe that North Dorset is unique in how it operates. [Interruption.] Heckling from the cheap seats. Our market towns operate on a hub-and-spoke model: the market town grows, and the villages are magnetised towards it, which is good for businesses large and small across the sectors, as we all recognise. It is also good for community cohesion at a time when we are all rightly concerned about rural exclusion and isolation; it brings people together. Our rural areas, by accident rather than by design, contain a disproportionately high number of retired or elderly people.
Jim Shannon
The hon. Gentleman is very kind. I commend him on bringing forward this debate. He is right to highlight elderly people. Social isolation is an issue for many people, not just those who are elderly or vulnerable, and it is worsened by the loss of basic banking. The hon. Gentleman told me before the debate that he has lost 14 banks. I have lost 11 banks in my constituency in Northern Ireland, which means that going to the bank becomes an all-day job, taking buses and making connections. Does he agree that there is a moral obligation on banks to ensure that they look after their customers? Indeed, if the banks do not do it under a moral obligation, does he think it is time for the Minister to make legislation to make it a legal obligation?
Simon Hoare
I agree. I will certainly come on to what I am asking the Government to consider, but the hon. Gentleman is right to talk about social isolation. We have lost 14 banks in my constituency since 2015. In 440 square miles, we have five banks remaining. We have had a fall of 74%. Across the county of Dorset, which includes the major conurbations of Bournemouth, Christchurch and Poole, we have had a decrease of 68% overall, with 101 branches closed and only 48 remaining in the whole of the county. Eight parliamentary constituencies are served by just 48 banks.
My constituent Deborah Jones made a good point in response to a recent announcement by Lloyds that it is closing its branch in Blandford Forum, a market town in my constituency with a large village hinterland. With the exception of Nationwide, it now has no proper, traditional high street branch.
Wendy Chamberlain (North East Fife) (LD)
The hon. Member mentioned Nationwide. My understanding is that 142 towns in the UK do not have a bank, and many are left only with a building society. It seems that the banks have exited while the building societies have stayed behind. I would appreciate his thoughts on what that says about the lack of community cohesion as a result of losing those banks. Often we are losing post offices at the same time.
Simon Hoare
The hon. Lady is right. She allows me to pause to pay tribute to the Post Office and to members of the Association of Convenience Stores, which have stepped in to provide some level of service in those areas where the banks have gone. That brings me to one of my key asks of the banks, and the Minister as well. Yet again, a rubric seems to be used to argue in favour of closures that is blind to whether it is an urban or a rural setting. That differential needs to be taken into account.
Dame Karen Bradley (Staffordshire Moorlands) (Con)
Will my hon. Friend give way?
Simon Hoare
I will, but I just want to make the point that was well made by my constituent in her email. She is a customer of Lloyds in Blandford and she does online banking, but during the storm, her digital services were down. She needed to do some important banking and had no way of doing it. She asks how her 92-year-old mother-in-law, who no longer drives and does not use the internet or have a mobile phone, is to contact her bank. At the moment, she is taken into Blandford every Wednesday for shopping and can pop into the bank. What will she do? She is a very independent lady and not ready to hand over all her affairs to a family member just because they have internet access. A number of organisations have drawn attention to that issue, such as Age UK in 2023. But before I get to that, I give way to my right hon. Friend.
Dame Karen Bradley
I congratulate my hon. Friend on securing this important debate. In Leek in my constituency we are about to lose our last two banks. We will be left with a building society with a cashpoint and the post office, yet Link has done a review suggesting that we do not need a banking hub because there are sufficient branches 9 or 10 miles away. That does not take account of rurality. We are a market town with, as he rightly described, a hub-and-spoke model, and it simply is not possible for elderly people to get to those other bank branches that are not easily accessible and are not on bus routes. Does he agree that rurality and topography are incredibly important and should be considered when deciding on banking hubs?
Simon Hoare
My right hon. Friend is absolutely right. When a bank closed in my constituency on an earlier occasion, I remember it telling me, “If customers need to talk to an actual person, they could use the branch in Poole.” I explained that that was right, but it would take two days out of the week, because those customers would have to get a bus to Poole, book a hotel, stay over and get the return bus the following day. It did sound a little bit nonsensical. I am therefore grateful to my right hon. Friend for underlining the point that I am seeking to make: there must be rural-proofing of the rubric for these decisions in the first instance and a better understanding of the geography of our rural areas as well as of the lack of public transport or other connectivity between the two places.
It is easy—dare I say it—if one represents Ealing, where the Minister is from. There are plenty of buses and tubes, and heaven knows what else, that I have no doubt will take the people around Ealing. North Dorset does not have those things, and nor do many of our rural areas, but I just do not think that point is recognised by the banks.
Simon Hoare
Let me make a little progress and I will give way first to my hon. Friend and then to the hon. Gentleman.
At the heart of everything this place does, we must think about social inclusion and trying to deliver services that meet the needs of a wide range of our population. According to Age UK, four in 10 adults over the age of 65 do not bank online, and three quarters of those who are over 65 have expressed the very clear desire that they wish to bank in person. The over-80s, people with disabilities and those on low incomes disproportionately want physical facilities, and yet they are being denied them.
As the Royal National Institute of Blind People points out, in my constituency alone there are, I think, 4,170 constituents who are either blind or partially sighted. They are unable to conduct banking online. Why are we excluding them from the personal management of their financial affairs?
Sir Bernard Jenkin
I congratulate my hon. Friend on obtaining this debate, which has attracted a large number of colleagues; he has touched a nerve. May I enter a plea on behalf of coastal towns such as Harwich, which suffer exactly the same difficulties as somewhere like Blandford Forum? In Harwich, the TSB has closed down and the Halifax has closed down, and that is affecting business in the town. Businesses need a banking hub. The Government have really got to come up with a solution, and a single hub representing all these financial institutions must be able to provide some kind of efficiency. I very much look forward to hearing my hon. Friend’s proposals.
Simon Hoare
I am grateful to my hon. Friend. His constituency, and indeed a lot of our coastal communities, will have that profile of constituents that is older and more settled, and they will want to see things delivered in the way that they are used to. That does not mean that they shun change completely, but they do have a legitimate expectation.
Let me take the House briefly through the timeline narrative of justification, and then I will give way to the hon. Member for Middlesbrough South and East Cleveland (Luke Myer). You and I, Madam Deputy Speaker, as part of that great Tory intake of 2015—those were the days; it is nearly 10 years—will remember being told that there would never be a town without a bank.
Gregory Stafford (Farnham and Bordon) (Con)
Will my hon. Friend give way on that point?
Simon Hoare
Let me just finish this point.
That was the first promise, but it seemed to disappear quite quickly. Then the Post Office came in, and then there seemed to be an over-reliance on building societies. I notice that Nationwide—I think it is Nationwide; I could be wrong—is saying in its television advertisement that it pledges not to close a branch before 2028, but it is under exactly the same cost and other pressures as its high street competitors.
Then we were told that the answer to the maiden’s prayer was going to be the banking hub, but there has been quite a lot of disappointment surrounding that. I suggest to the Minister that that is in part to do with the erroneous conflation of access to cash and access to banking services. Link has assessed, perfectly properly, that in Blandford there are ATMs at the local Tesco, at the local Morrison’s and at Nationwide, but just try asking an ATM to amend or set up a standing order or direct debit. A small businessman or businesswoman who wants to extend their line of credit or has a question mark over something cannot ask an ATM those questions. Saying that there is access to cash, as important as that is, is far too blunt an instrument when trying to assess the impact of these closures.
Luke Myer
North Dorset is quite far away from the north-east, but many of the issues the hon. Gentleman is talking about are issues that I am encountering in my constituency as well. The rural side of my constituency in East Cleveland contains many villages and towns with high deprivation and high rurality, and I am endeavouring to get a banking hub in one of those towns that has lost access to banks over many years. Does he agree that deprivation needs to be included as a metric alongside rurality?
Simon Hoare
I agree absolutely. A more sensitive and refined definition of the hub-and-spoke model is also needed. If we look at the resident catchment of a market town, we can construct a compelling argument that a proposal for a hub does not stack up, but we must add in the thousands of people who live in the villages that look to it and are magnetised to it, and who will spend more money in those businesses, and the businesses themselves—not just individuals—who use those businesses.
Simon Hoare
Let me give way to my hon. Friend from Surrey and then I will give way to the hon. Lady.
Gregory Stafford
I would not like to claim that I am the Member of Parliament for the whole of Surrey. My Hampshire residents would not be pleased about that. Just last Friday, the Barclays bank in Farnham closed, leaving the whole of my constituency of 101,000 people with just one bank, Santander, and one building society, Nationwide. We are lucky enough to have a banking hub in Haslemere, and we are going to get another one in Whitehill and Bordon—Liphook does not have one—but given that there are only 100 banking hubs across the country and that the Government say they are going to put forward 350, does my hon. Friend agree that the Government are going to have to turbocharge those banking hubs, not just for access to cash, but more especially, as he mentioned, for proper banking services for residents in rural constituencies?
Simon Hoare
I agree entirely with my hon. Friend who represents Surrey and part of Hampshire.
I would be happy for the Minister to write to me on this point if it is easier, but it strikes me that there is scope for a little bit of wiggle room with regard to the Financial Services and Markets Act 2023. The Act did not give the Financial Conduct Authority powers to reflect on and assess wider banking services. The Minister’s party, when in opposition, was very keen that it should do so. When my party was in government, for some unknown reason we resisted amendments to that effect, and Labour, then in opposition, did not push them to a Division. I just think that there is too gaping a lacuna in all of this, in that it is only access to cash that is assessed, and not access to banking services.
Simon Hoare
Let me give way to the hon. Member for North Shropshire (Helen Morgan), then I will give way to my hon. Friend.
Helen Morgan
The hon. Gentleman is making an excellent speech outlining the issues. In North Shropshire, four of my five market towns have lost all their banks and only two of them will get a banking hub. Does he agree that we need to look at a much wider area to make those banking hubs work, because people who work in small hamlets and villages without access to public transport simply cannot access one that is maybe 20 miles away?
Simon Hoare
The hon. Lady is absolutely right. Again, I hope that any of the banks or regulators who may listen in or read the report will understand that this is not an issue that divides by party; it affects constituents across the country irrespective of which party represents them in this place. The key point is to have a proper assessment of rurality and the differential of living in a rural area compared with an urban area.
I commend the Government for their support for hubs, but they need to be more physical and robust in driving them forward. It is almost as if the banks are marking their own homework as to whether the argument in favour of a hub stacks up. As Sarah Coles of Hargreaves Lansdown commented a year or so ago:
“The closure of bank branches is a vicious circle. The more that close, the more people move online”.
Of course, by definition, the more people move online, the more that almost hollows out the argument to justify creating a hub.
I understand that initially the banks were slightly reticent, just as the mobile phone operators were about shared masts—that somehow clients would be pinched and all the rest of it—but the hubs are a shared facility jointly financed by the banks. Those banks need to remember that they are still in business principally due to the good will of the British taxpayer and the Exchequer during the financial crash of 2008, who keep our banking sector afloat. They owe a little bit of payback, as a number of my constituents have been keen to point out.
The hubs seem to work and fill that gap; but as I say, marking one’s own homework and setting the rubric to decide whether a hub will work is not right. The Treasury could take a more engaged and proactive leadership role on the matter.
Harriet Cross
I thank my hon. Friend for securing this important and timely debate. I certainly spent a lot of my recess looking at banking hubs, especially in a town called Ellon in my constituency, which has recently lost its last bank. Ellon is a large town of over 7,000 people, and if the surrounding villages are included, it is getting up towards 11,000 people. However, it does not qualify for a banking hub. Link has not given its permission to have a banking hub, saying that there are not enough businesses in the town. It does not take into account, for example, the farming businesses, and the rural nature of the area, as we have touched on, is not taken into account in the criteria set out by Link.
I am glad that my hon. Friend mentioned the importance of “rural-proofing” the conditions that Link looks at to deliver a banking hub. I hope that this debate and the Minister’s response will put some pressure on Link to look more holistically at the rural environment when it comes to considering hubs, because places like Ellon need a banking hub.
Simon Hoare
I am grateful to my hon. Friend, because again she enhances and underlines the argument that I have been deploying, and for which colleagues across the House have been kind enough to add their support.
I suppose my annoyance is that the people who write the policies, whether they are the regulators or those in the bank boardrooms, do not know what living in a rural area is like. If they are in the Square Mile, they are not part of a rural community. They may have a getaway weekend retreat that they dash off to in their personalised number-plated Land Rover or Range Rover, in which they take their food down from Waitrose, before coming back to London on the Sunday, but that is not living in a rural area. That is not running a business in a rural area.
Simon Hoare
I give way to the hon. Member for North Northumberland, which really is a rural area.
David Smith
I thank the hon. Member for securing the debate. He mentioned the Square Mile there. In my constituency of North Northumberland—the third largest in England—there are eight branches in 2,100 square kilometres. That has gone down by 64% since 2015.
I want to highlight a point raised elsewhere in the debate. Banking hubs are important and, like other Members, I am pushing for them in my constituency; but again, the role of the Post Office in those banking services is key. We had to fight together as a community to secure Wooler post office. I must give credit to Glendale Gateway Trust for securing that. Does the hon. Member agree that post offices are absolutely vital and part of the solution to this problem?
Simon Hoare
The hon. Gentleman is absolutely right. In many respects—[Interruption.] I am beginning to get paranoid; I hear voices. He is absolutely right to make the point that he does. I pay tribute to how the Post Office has stepped up. Very often, in providing that sort of transactional bank service, it has supported the continuance of rural post offices, which can often be marginal and fragile businesses themselves. Again, I think it an easy crutch to lean on to say, “Well, of course, the post office does this.” We can all applaud what post offices do, but customers cannot use them to talk to someone from their bank to discuss their overdraft, loan, mortgage, business credit card maximum or whatever it may happen to be.
I say to the Minister that we want our local businesses and small and medium enterprises to flourish—small, micro and family-owned businesses are very much the hallmark of a rural economy—and they have the greatest need, on a more regular basis, for that relationship with their banks. Then, the banks know the nature of the business and its long-term viability, and they can build that relationship.
Wendy Chamberlain
I am grateful to him for giving way a second time. He is making an important point. One of the things that I have always found interesting is that when a bank has closed in North East Fife, it offers to deliver not an access-to-cash service but some kind of pop-up banking advice service in the constituency. That suggests to me that banks know very well that giving banking service advice is important. Instead of doing it as a sop for a number of months before giving up, they need to do it on a more regular and permanent basis.
Simon Hoare
The hon. Lady is again absolutely right. Surely it makes good commercial sense for high street banks, as we used to call them—increasingly, they are not particularly high street banks—to be able to tout their wares to existing or potential customers. That is how to generate business: by having a presence. A hub makes a very good presence for them all, but they seem to move at the speed of the slowest, and if one is not particularly convinced, the whole thing sort of seems to fall down. I know that the Government are trying to do more on that, but I think they could do even more to turbocharge it.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Falmouth is to have a banking hub. We are losing our last bank; Lloyds is going at the end of the year. The interesting thing about that is that the banking hub will be open 9 to 5, five days a week—and potentially even more—whereas the banks were very slowly cutting their opening hours after covid, and it was hard to find a bank outside school hours. That of course did not help rural businesses, which could not get there in time.
Simon Hoare
The hon. Lady is right. The cynic might suggest that the opening hours were set in order to try to deliberately reduce footfall—possibly. That might be hugely cynical, and if it is, Madam Deputy Speaker, I will plead guilty as charged.
Dame Karen Bradley
My hon. Friend is so very generous to indulge me a second time during his excellent speech. I am struck by the impact on charities. As any trustee of a charity will know, trustees quite regularly have to prove their identity at the bank that the charity chooses to bank with. When it is simply not possible for trustees to get to a branch of the bank to prove their identity, the impact on rural charities will be devastating.
Simon Hoare
I admire my right hon. Friend’s perseverance in ever trying to change the signatory on a charity bank account. People have died of boredom and exasperation trying to do it. A 60-year-old has to turn up with their great grandparents, their first cat and everything else to prove who they are. The fact that the bank has known them as a private customer for years seems to pass it by.
I hope I have made my points to the Minister, but let me rehearse them very briefly in bullet point form. One concerns the rubric to defend a bank closure. The assessment of access to cash needs a rural dimension, and there needs to be a much more granular understanding of the hub-and-spoke geography of a rural economy, which is very different from an urban one. We need to move away pretty quickly from merely assessing as satisfactory access to cash as defined by access to an ATM.
We need to turbocharge the delivery of hubs and bring pressure to bear on the banks, and there are a variety to do that. It can be carrot and stick, through tax and other policies, to try to nudge them to move at a faster pace. I hope, however, that the Government will take the lead on social inclusion for our rural areas, reflecting the fact that they have far more small, independent shops and businesses, and that the population is disproportionately older and/or retired and dealing with disabilities, infirmities, frailties and so on. Those things should be taken into account, and I remain to be convinced that they are.
I think an opportunity exists to amend the Financial Services and Markets Act 2023 to give the FCA greater powers to look at wider banking services, not just cash. Our rural communities struggle. Our economies are fragile, and wages are usually lower than in urban counterparts. Another bank closure is not just another bank closure in a rural market town.
James Naish (Rushcliffe) (Lab)
Although I welcome banking hubs, I am increasingly concerned that banks see them as an excuse to accelerate the closure of core services. Does the hon. Gentleman agree that pressure needs to be applied, first and foremost, to the banks to keep branches open on the high street, and that banking hubs should remain as an infill as opposed to being seen as the solution? That is the danger when we, as a collective, talk so frequently about banking hubs.
Simon Hoare
The hon. Gentleman makes an interesting point. I think the trend has been pretty clear, and the goalposts have moved. From late 2008 or 2009 through to about 2015 or 2016, I think the Government could and should have been much tougher and more exacting, but we are where we are. I take his point and I understand it, but let us not let the delivery of the good be sacrificed in pursuit of the excellent, which seems unattainable.
I think the trend in what the banks are doing is pretty well set, and it is probably irreversible. All sorts of things play into that. What I think is arrestable is the attitude of, “We will pull out even if we are the last branch open, and somebody else will pick up the slack”—principally the Post Office—or “We expect our customers to travel great distances to find a bank that is open and can help them.” That may require a number of visits in the case of something like an overdraft.
That is where the idea of a hub comes in. I understand that we are due to have our first hub in Dorset at some point this year—in Sherborne, in the constituency of the hon. Member for West Dorset (Edward Morello)—but North Dorset needs one as well. I will certainly be campaigning for one in Blandford. I would value the support of the Treasury Bench to emphasise to the banks that they have a duty of care to their customers, and they cannot just cut them adrift and say, “Make your own way. Find an alternative. Beat a path to another branch. It is terribly inconvenient for you, but that is what we are telling you to do, because we have no social responsibility at all.”
For the sake of our rural communities, economy and businesses, for charities and the farming community, and for a host of other people who want that personal interaction because they do not have access to the internet, or do not want to use online banking or an app and so on, there should be a bank teller, as we used to call them, from a bank, in a hub at set times, to help their customers. By so doing they will not damage our rural and market town economies as much as many of us fear, and as many hon. Members have attested to in this short debate.